There has been much conversation regarding short selling and the recent dramatic fall in price in this forum- here are some points to consider.
Note I haven't posted previously but decided I have to make a comment so I have joined the forum after having read many of the threads
Disclaimer – I don’t have a dog in this fight just a concerned pragmatic shareholder with too much time on my hands
1. If it weren't for some recent short covering to cushion the strong selling the share price would likely be considerably lower- so be thankful for efficient markets!
2.That got me thinking and why such a dramatic fall over the last month?- What might the short sellers know, that ordinary shareholders maybe haven't considered, and have known for some time?- see below.
Can I hypothesise the following as a probable additional cause other than- missed milestones, cash burn, etc, and may also go some way to hopefully help restore NMT in the eyes of the market to its pre emanate position as a battery minerals recycling leader in its field, with clever, pragmatic and, forward thinking management. That's the reason I originally invested.
The unresolvedlitigation initiated in 2020!
-I would postulate the short sellers are well aware of this piece of information as part of their DD and would certainly have better knowledge of the claims than I do and ,it will continue to weigh heavily on the stock and be high on the list of short seller considerations until it is resolved. Markets hate uncertainty and it is reflected in price!
See ASXannouncement Oct 2020
It is rumoured ( and I base my theory on that unconfirmed and as yet unproven rumour and if somebody on this forum with knowledge of the matter can confirm or deny it that would be helpful) that a recent mediation(apparently it is the last required hoop to jump through prior to trial ) failed to reach a commercial resolution-I note the corresponding share price fall from 90c to 68c some 24%. I don't allege anybody has or had any inside information, but it looks like some shareholders may have headed for the exit over the last month, which may be entirely coincidental, giving the short sellers the volume around 80c they needed to partially cover their positions which has shown up in the daily short covering reported. Don't be surprised if short sellersstart to re establish their positions having banked a win if the above is true. Again my theoryonly..
I think we, asshareholders , do have a right to understand the risks , nature and size of the claim.Perhaps management should provide some transparency as nothing was said in thelast annual report about the case. It was reported in the Mineral ResourcesLimited annual report. I know this as I am a shareholder. DYOR
Resolution of this matterwould likely take considerable pressure off the stock, go some way to restoringmanagement credibility and, may see further significant short covering IMO.This will also help achieve a better price for shareholders and minimisedilution and, most importantly, remove any uncertainty for participants in thecapital raising likely due this year to fund their share of projects andrestore their balance sheet.. IMO
The current pain beinginflicted on shareholders in loss of market cap (24% in 1 month about $100m) ismassive and reflects poorly on directors
I won’t be adding to my position until this is resolved either by settlement or at trial- too much uncertainty and unknown downside risk in my view
I won’t be making further comment and leave it to the forum to make what they will of the above. It only a theory after all predicated on an as yet unconfirmed rumour
GLTAH
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